December fuel price update

Drivers play the great Christmas petrol price postcode lottery

16 December 2011

Drivers play the great Christmas petrol price postcode lottery

Average petrol prices have fallen to their lowest for nine months. However, drivers in many parts of the country are paying a Scrooge-like £1 or more extra per tank compared to those in other areas, December’s AA Fuel Price Report reveals.

Diesel drivers have even less to celebrate with the price gap between petrol and dearer diesel now at 8.61p, up 1.36p on a month ago. That increased differential alone has added 10,000 miles to the point at which owners, who switch from petrol cars to diesels for better fuel efficiency, recoup the typical £1500 extra purchase cost.

UK petrol pump prices now average 132.54p a litre, a level last seen in March and down 1.16p on a month ago (133.70p). However, across London and the South East, a litre of petrol averages 133.55p compared to 131.63p across the North, North West and Yorkshire / Humberside. Diesel, which averaged 140.95p a litre in mid November, now costs 141.15p.

Other features of the great Christmas petrol price postcode lottery include:

The cheapest supermarket charges on average 1.81p less for petrol than its nearest rival - the biggest gap this year.

Northern England drivers have enjoyed an extra half-penny cut in petrol prices over the past month compared to those in the more populous south.

Wholesale prices that were around 49p a litre in early September, when petrol averaged around 135.8p a litre for eight days, fell to around 44p a litre throughout much of November and early December.

In many towns where supermarkets are uncompetitive on fuel prices some independent petrol stations are undercutting the local superstore by up to 2p a litre.

Although falling oil prices have brought prices back to where they were in the spring, the relief isn’t that great for rural and lower-income drivers

Edmund King, AA president

Overall, the bottom line is that the UK cost of petrol has averaged 133.83p a litre this year while the pump price of diesel has averaged 139.17p. This compares with last year’s 117.36p average for petrol and 119.75 for diesel.

For a family with two petrol cars, the 16.47p-a-litre year-on-year increase has added £419.66 to the annual fuel bill. The 19.42p-a-litre extra cost of diesel over the year has added on average £15.54 to the cost of filling a commercial van’s 80-litre tank.

“As more severe winter conditions push up fuel consumption and families contemplate the cost of Christmas travel, it will anger many that pump prices remain artificially high in so many places. This is simply because there isn’t the transparency in the fuel market to indicate where prices should be. Only when such glaring regional disparities as we’ve seen this month emerge or prices between neighbouring towns vary by as much as 4p a litre do motorists know that something is wrong,” says Edmund King, the AA’s president.

“If it is a case that some of the cash consumers save at the supermarket checkout is clawed back at the pump, it is a risky strategy. AA research shows that 28% of its members budget a set amount on fuel, that rising to 40% among less well-off drivers. Getting to and from a superstore at the end of the week can easily consume a litre of fuel and that may be enough to make some customers shop closer to home.

“We are also seeing a growing number of independent retailers taking the opportunity to undercut supermarket rivals by as much as 2p a litre. Drivers just wish there were more.

King adds: “Although falling oil prices have brought prices back to where they were in the spring, the relief isn’t that great for rural and lower-income drivers. For many, this year has been like 12 rounds in the ring with a heavyweight boxer. Yes, the tempo of the pump price punches may have lessened but drivers are still being pummelled. Some have been knocked out for good.“